Correlation Between Alimera Sciences and Kamada

Can any of the company-specific risk be diversified away by investing in both Alimera Sciences and Kamada at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alimera Sciences and Kamada into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alimera Sciences and Kamada, you can compare the effects of market volatilities on Alimera Sciences and Kamada and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alimera Sciences with a short position of Kamada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimera Sciences and Kamada.

Diversification Opportunities for Alimera Sciences and Kamada

0.0

Correlation Coefficient

Alimera Sciences  Kamada

Pay attention - limited upside

The 3 months correlation between Alimera and Kamada is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alimera Sciences and Kamada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamada and Alimera Sciences is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alimera Sciences are associated (or correlated) with Kamada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamada has no effect on the direction of Alimera Sciences i.e., Alimera Sciences and Kamada go up and down completely randomly.

Pair Corralation between Alimera Sciences and Kamada

If you would invest  582.00  in Kamada on December 29, 2024 and sell it today you would earn a total of  93.00  from holding Kamada or generate 15.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alimera Sciences  vs.  Kamada

Alimera Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alimera Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Alimera Sciences is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Kamada

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kamada are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Kamada sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alimera Sciences and Kamada

The main advantage of trading using opposite Alimera Sciences and Kamada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimera Sciences position performs unexpectedly, Kamada can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kamada will offset losses from the drop in Kamada's long position.

The idea behind Alimera Sciences and Kamada pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.